The central bank’s move to rein in the property market may have scared off potential buyers at yesterday’s auction, organized by DTZ Debenham Tie Leung (戴德梁行), to liquidate three commercial buildings and two parcels of land in Taipei, the realtor said.
Two commercial building properties — Xining Building (西寧大樓) and part of Li Fu Building (力福大樓) in Ximending (西門町) — were sold, but part of Yuan Yuan Building (元元大廈), which is located in the vicinity, and two plots of land failed to attract any bidders, Eagle Lai (賴一毅), a manager at the realtor, said by telephone.
A total of 28 bidders showed up at the auction, but some didn’t even place bids, Lai said.
“The central bank’s move, to a certain degree, has triggered concern among bidders over the reduced loan to value ratio,” Lai said.
Xining Building, which sits on a 156.4 ping (517m²) parcel of land and totals 1,186.89 ping in floor space, was sold to publicly traded Hwa-Hsia Leasing & Financing Co (華夏資融) for NT$969.88 billion (US$30 million), or NT$817,160 per ping, the auctioneer said.
That represented a record-high unit land price of NT$6.2 million per ping in the district and a 10.2 percent premium over its floor price of NT$880 million.
To maintain a steady cash inflow, Hwa-Hsia, chaired by Xavier Lee (李家弘), will renew leasing contracts with the building’s tenants, including Holiday KTV (好樂迪), around 2012, Lai said.
The building currently yields a 4.2 percent return with a fixed annual rental income of NT$3.09 million, he said.
Several floors of Li Fu Building, with total floor space of 1,285.55 pings, were sold to an individual investor surnamed Huang for NT$231.66 million, more than its asking price of NT$230 million, the realtor said, refusing to give more details.
That represented a unit price of NT$180,200 per ping.
Lai said his company would consult the owners of Yuan Yuan Building, which had offered 618 ping in floor space and asked for NT$536 million, and the two other plots of land to determine whether they would lower their asking price or plan to hold another auction.
Separately, Asia Pacific Land (APL, 亞太置地) yesterday acquired the Galaxy Commercial Building (萬國商業大樓), which sits on a 386 ping plot of land and offers 4,429 ping in floor space in the heart of Ximending, for NT$3.05 billion, said the deal’s arranger, Jones Lang LaSalle Taiwan.
The building currently yields a return of more than 4 percent from annual rental income, said Tony Chao (趙正義), the realtor’s managing director.
He added that the return was likely to jump after APL takes over and brings in new value-added retail tenants.
Chao said APL is the first foreign investor to bank on the nation’s inking of the Economic Cooperation Framework Agreement with China by taking up property investment.
Expressing confidence in the local market, APL, which manages US$4.8 billion, plans to raise a private equity fund of NT$3 billion to NT$5 billion this year to further invest in domestic properties, its executive Aaron Chan (詹偉立) said in a statement.
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